How does performance vary between early and late adopters of Industry 4.0? A qualitative viewpoint

Abstract

PurposeIndustry 4.0 is a new trend among organizations. Some organizations have been early adopters or later adopters of Industry 4.0. The purpose of this paper is to investigate how performance effects vary between early and late adopters of Industry 4.0.Design/methodology/approachThis study applies a qualitative research methodology using grounded theory. 14 senior management professionals who have implemented Industry 4.0 participated in this study through a theoretical and snowball sampling approach. These professionals were from manufacturing and service sectors, from North America, Europe and Asia. The study used semi structured open-ended interviews to capture the organizational performance on operational, financial, environmental and social dimensions.FindingsThe findings were analyzed in terms of four broad themes which emerged from the interviews. In operational performance the operational and implementation cost will be higher for early adopters. The late adopters may enjoy the advantage in terms of improved business models. In terms of financial performance, the early adopters may see a marginal increase in profit and increased stock price compared to late adopters. The performance on the environmental dimension will see early adopters enjoying material efficiency, energy savings and an improved image of the company compared to late adopters. In social performance, the early adopters will provide a better quality of work life, safer manufacturing environment. However, the resistance from labor unions will be higher for early adopters compared to late adopters.Practical implicationsOrganizations must decide the timing of implementation of Industry 4.0. This study will act as a guide wherein they can decide to be an early adopter or late adopter based on knowledge of the resulting performance consequences.Originality/valueThis is the first paper that studies the performance effects of early versus late adopters of Industry 4.0.